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NEW YORK, June 9 -- The U.S. Supreme Court last night declined to hear an appeal from opponents of the sale of Chrysler's assets to Italian automaker Fiat, clearing the way for the government-backed transaction to take place immediately.

The order capped a hectic week in which creditors, dealers and others raced to block a deal that now appears destined to become a template for a similar bankruptcy involving General Motors.

Another important piece of Chrysler's plan fell in place yesterday when a federal bankruptcy judge granted the automaker's request to sever ties with 789 dealerships.

Together, the rulings allowed the Obama administration to get back on track with its plan to engineer a speedy restructuring of America's struggling automotive industry, and turn Chrysler and GM into leaner global rivals.

"We are gratified that not a single court that reviewed this matter, including the U.S. Supreme, found any fault whatsoever with the handling of this matter by either Chrysler or the U.S. government," the Treasury Department said in a statement. "We are delighted that the Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker."

The deal will give Chrysler, known for its minivans and pickups, access to fuel-efficient technology from Fiat, which is not putting up any cash for its minority stake in the new company.

The sale, if completed today as expected, means the new Chrysler will have sped through bankruptcy court in just 41 days, only to face its true test: Selling cars in the toughest market in decades.

Chrysler said in a statement last night that the sale would enable the new company to "continue work already underway on new environmentally friendly, fuel-efficient, high-quality vehicles that will become Chrysler's hallmark going forward."

Chrysler plans to sell most of the assets it deems valuable to a new entity run by Fiat and owned in part by the United Auto Workers and the U.S. and Canadian governments. Chrysler's creditors would split the $2 billion government-provided proceeds from the sale.

A group of Indiana pension and construction funds had opposed that transaction, arguing that the Chrysler sale favored lenders much more junior to them. They were joined by consumer groups who complained that the sale would exempt the new Chrysler from past product liability claims.

But the government and Chrysler argued, along with Fiat, that the only alternative to the sale was a liquidation of the automaker, which would result in tens of thousands of job losses.

After four days of competing petitions and responses, the Supreme Court in effect decided to stay out of the case. The unsigned opinion said the "denial of a stay is not a decision on the merits of the underlying legal issues."